A separate index measuring inquiries about new projects fell to 39.9, also a low in the survey that dates back to 1995.

Firms specializing in design for government and nonprofit institutions reported a drop in billing hours in October.

"Until recently, the institutional sector had been somewhat insulated from the deteriorating conditions affecting the commercial and residential markets," said AIA chief economist Kermit Baker.

"Now we are seeing that governments and nonprofit agencies are having difficulties getting bonds approved to finance large-scale education and health-care facilities, furthering the weak conditions across the construction industry," Baker said.